The crypto market space has been on auto crash for a while now, and various crypto firms have suffered from this crash.
The latest organization to have been impacted by the state of the market and filed for bankruptcy is Celsius Network – a cryptocurrency loan company. Headquartered in Hoboken, New Jersey. The company says the action is to enable a “comprehensive restructuring plan” that will benefit all stakeholders.
In a statement issued on Wednesday, Celsius who is facing a liquidity crisis has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, following in the footsteps of Voyager Digital.
The statement issued by the company reads:
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“Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers. Without a pause, the acceleration of withdrawals would have allowed certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”
Related: Voyager Bankruptcy: Users May Not Get Their Crypto Back
Alex Mashinsky, The CEO and Co-founder of Celsius Network said in a statement,
“We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
On June 12, Celsius Network paused the withdrawal from its platform, cut jobs, and also hired experts who would advise the company and help propel it from this financial troubles in the latest crypto liquidity crisis.
Celsius Network also revealed substantial cash on hand of about $167 million which is enough to “support certain operations during the restructuring process.”
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The company has also appealed to the court to let them continue the normal course of operation to pay employees and continue benefits. However, they are not requesting the authorities to allow withdrawals at the time, customers who are affected will be addressed through the Chapter 11 process.
The team put together by the company to help them in this crisis includes; Kirkland & Ellis LLP serving as legal counsel, Centerview Partners serving as a financial adviser, and Alvarez & Marsal serving as restructuring adviser to Celsius.
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